COMPREHENSIVE ACCOUNTING FOR MERCHANDISING BUSINESS

Listed below are the February 1, 2020 account balances of the Marikina D. Boro Shoes Company:

110 Cash P 33,000

120 Accounts Receivable 192,000
125 Allowance for Bad Debts
130 Merchandise Inventory 413,000
140 Supplies 51,000
150 Prepaid Insurance 48,000
160 Land 460,000
170 Building 1,750,000
175 Accumulated Depreciation - Building P 350,000
180 Equipment 2,310,000
185 Accumulated Depreciation - Equipment 630,000
210 Accounts Payable 108,000
220 Salaries Payable
230 Mortgage Payable 2,600,000
310 Boro, Capital 1,569,000
320 Boro, Withdrawals
330 Income Summary
410 Sales
420 Sales Returns and Allowances
430 Sales Discounts
510 Purchases
520 Purchases Returns and Allowances
530 Purchase Discounts
540 Freight In
610 Salaries Expense
620 Supplies Expense
630 Insurance Expense
640 Depreciation Expense - Building
650 Depreciation Expense - Equipment
660 Freignt Out
670 Advertising Expense
680 Interest Expense
690 Bad Debts Expense
695 Miscellaneous Expense
P 5,257,000 P 5,257,000

The Accounts Receivable of P192,000 is related to sale to Ariana Venti on January 28, 2020. Terms: 2/10, n/30.
The Accounts Payable balance of P108,000 is attributable to a purchase on January 29, 2020 from Air Binay Company. Term

During the month of February, 2020, the following transactions occurred:

 Feb 1 Collected P113,000 from Ariana Venti.
2 Paid P64,000 to Air Binay Company.
4 Purchased merchandise to Krusty Lopez, P170,000. Terms: FOB Shipping Point; 3/10, n/30.
5 Sold merchandise on account to Wasak Efron, P270,000. Terms: FOB Shipping Point; 2/10, n/30.
7 Paid for advertising for the month of February, P6,000.
7 Sold merchandise to Steve Barbie on cash, P250,000.
8 Paid the amount due to Krusty Lopez.
9 Paid Going Merry P4,000 for delivering merchandise last February 4.
10 Received returns from Wasak Efron, P70,000.
12 Received payment from Wasak Efron, less returns and discounts.
14 Paid P26,000 interest on mortgage payable.
15 Paid salaries, P51,000.
16 Shipped merchandise on account to LeBrown James, P392,000. Terms: FOB Destination; 2/10, n/30.
17 Received by LeBrown James merchandise shipped last February 16.
18 Paid Thousand Sunny for freight charges on the sale to LeBrown James, P7,000.
19 Acquired supplies for cash, P21,000.
20 Purchased P125,000 of merchandise from Stilleto Shoes on account. Terms: FOB Destination; 3/10, n/30.
21 Received the merchandise purchased on February 20.
22 Paid P7,000 miscellaneous expenses.
23 Received payment from LeBrown James, less discounts.
24 Purchased P373,000 of merchandise on account to Addadis Company. Terms: FOB Shipping Point; 3/10, n
24 Paid Going Merry P9,000 freight for delivering merchandise acquired from Addadis.
25 Sold Merchandise to LeBrown James on account, P420,000. Terms: FOB Shipping Point; 2/10, n/30.
26 Received returns from LeBrown James, P71,000.
28 Boro withdrew P200,000 from the business.
28 Returned merchandise purchased from Addadis on February 24, P25,000.

Required:
1. Post the February 1 balances to the ledger accounts.
2. Use the special journals to record the February transactions and post them to their
respective ledger accounts. Use the Subsidiary Ledgers for Accounts Receivable and Accounts Payable.
3. Prepare the worksheet using the following information:
a.) Salaries in the amount of P51,000 have accrued on February 28.
b.) Insurance coverage with premiums of P2,000 has expired at month-end.
c.) Depreciation on the building and equipment for the month amounted to P9,000 and P12,000, respectiv
d.) Supplies on hand at month-end amounted to P14,000.
e.) Estimated uncollectible accounts on Ariana Venti amounted to P15,000.
f.) A count of the merchandise inventory on February 28, 2020 amounted to P397,000.
4. Prepare an Income Statement, a Statement of Changes in Equity, and Balance Sheet as of February 28, 2020.
5. Prepare the adjusting and closing entries for the month and post them to ledger accounts.
6. Prepare a post-closing trial balance and necessary reversing entries.
erms: 2/10, n/30.
rom Air Binay Company. Terms: 3/10, n/30.
nt; 3/10, n/30.
g Point; 2/10, n/30.

Destination; 2/10, n/30.

OB Destination; 3/10, n/30.

: FOB Shipping Point; 3/10, n/30.

ping Point; 2/10, n/30.

nd Accounts Payable.

P9,000 and P12,000, respectively.

heet as of February 28, 2020.

MARIKINA D. BORO SHOES COMPANY

SALES JOURNAL

INVOICE
DATE ACCOUNTS DEBITED PR NUMBER

2020

Feb 5 Wasak Efron a

17 LeBrown James a
25 LeBrown James a

MARIKINA D. BORO SHOES COMPANY

PURCHASES JOURNAL

RR
DATE ACCOUNTS CREDITED PR NUMBER

2020

Feb 4 Krusty Lopez a

21 Stilleto Shoes a
24 Addadis Company a

MARIKINA D. BORO SHOES COMPANY

CASH RECEIPTS JOURNAL

OR / CR
DATE EXPLANATION PR NUMBER

2020

Feb 1 Collection from Ariana Venti a

7 Sold merchandise to Steve Barbie a
12 Received payment from Wasak Efron a
23 Received payment from LeBrown James a

MARIKINA D. BORO SHOES COMPANY

CASH DISBURSEMENTS JOURNAL

CHECK
DATE EXPLANATION PR NUMBER

2020

Feb 2 Payment to Air Binay Company a

7 Payment of Advertising for February a
8 Paid the amount due to Krusty Lopez a
9 Paid Going Merry for delivering merchndise a
14 Paid interest on mortgage payable a
15 Paid salaries a
18 Paid Thousand Sunny for freight charges a
19 Acquired supplies a
22 Paid miscellaneous expenses a
24 Paid Going Merry for delivering merchndise a
28 Withdrawal of the owner a
MARIKINA D. BORO SHOES COMPANY

GENERAL JOURNAL

DATE PARTICULARS PR

2020

Feb 10 Sales Returns and Allowances 420

Accounts Receivable - Wasak Efron 120
to record return of merchandise

26 Sales Returns and Allowances 420

Accounts Receivable - LeBrown James 120
to record return of merchandise

28 Accounts Payable - Addadis Company 210

Purchase Returns and Allowances 520
to record return of merchandise

28 Salaries Expense 610

Salaries Payable 220
to adjust accrued salaries

28 Insurance Expense 630

Prepaid Insurance 150
to adjust insurance expired at month-end

28 Depreciation Expense - Building 640

Depreciation Expense - Equipment 650
Accumulated Depreciation - Building 175
 Accumulated Depreciation - Equipment 185
to adjust depreciation expense

28 Supplies Expense 620

Supplies 140
to adjust supplies used

28 Bad Debts Expense 690

Allowance for Bad Debts 125
to adjust bad debts of Ariana Venti

28 Merchandise Inventory, End 130

Sales 410
Purchases Returns and Allowances 520
Purchase Discounts 530
Income Summary 330
to close nominal accounts with credit
balances and to establiush ending
inventory

28 Income Summary 330

Merchandise Inventory, Beginning 130
Sales Returns and Allowances 420
Sales Discounts 430
Purchases 510
Freight In 540
Salaries Expense 610
Supplies Expense 620
Insurance Expense 630
Depreciation Expense - Building 640
Depreciation Expense - Equipment 650
Freight Out 660
Advertising Expense 670
Interest Expense 680
 Bad Debts Expense 690
Miscellaneous Expense 695
to close nominal accounts with credit
balances and to establiush ending
inventory

28 Income Summary 330

Boro, Capital 310
to close income summary to capital

28 Boro, Capital 310

Boro, Withdrawals 320
to close personal withdrawals
 DEBIT CREDIT
ACCOUNTS NOTES
TERMS RECEIVABLE RECEIVABLE SALES

2/10, n/30 270,000 270,000

2/10, n/30 392,000 392,000
2/10, n/30 420,000 420,000

1,082,000 1,082,000
(120) (410)

DEBIT CREDIT
ACCOUNTS
TERMS PURCHASES SUPPLIES PAYABLE

3/10, n/30 170,000 170,000

3/10, n/30 125,000 125,000
3/10, n/30 373,000 373,000

668,000 668,000
(510) (210)
 DEBIT CREDIT
ACCOUNTS NOTES
CASH SALES DISCOUNT RECEIVABLE RECEIVABLE

110,740 2,260 113,000

250,000
196,000 4,000 200,000
384,160 7,840 392,000

940,900 14,100 705,000

(110) (430) (120)

DEBIT CREDIT
ACCOUNTS
PURCHASES FREIGHT IN PAYABLE CASH

64,000 62,080
6,000
170,000 164,900
4,000 4,000
26,000
51,000
7,000
21,000
7,000
9,000 9,000
200,000
 13,000 234,000 557,980
(540) (210) (110)

DEBIT CREDIT

70,000
70,000

71,000
71,000

25,000
25,000

51,000
51,000

2,000
2,000

9,000
12,000
9,000
 12,000

58,000
58,000

15,000
15,000

397,000
1,332,000
25,000
7,020
1,761,020

1,493,100
413,000
141,000
14,100
668,000
13,000
102,000
58,000
2,000
9,000
12,000
7,000
6,000
26,000
 15,000
7,000

267,920
267,920

200,000
200,000
CREDIT SUNDRIES
NOTES
PAYABLE ACCOUNT TITLE PR DEBIT
DIT SUNDRIES

SALES ACCOUNT TITLE PR DEBIT

250,000

250,000
(410)

CREDIT SUNDRIES

PURCHASE DISCOUNT ACCOUNT TITLE PR DEBIT

1,920
Advertising Expense 670 6,000
5,100

Interest Expense 680 26,000

Salaries Expense 610 51,000
Freight Out 660 7,000
Supplies 140 21,000
Miscelllaneous Expenses 690 7,000

Boro, Withdrawals 320 200,000

 7,020
(530)
CREDIT
CREDIT

CREDIT
MARIKINA D. BORO SHOES COMPANY

GENERAL LEDGER

CASH AC

2/1/2020 BALANCE 33,000 557,980 CDJ1 2/28/2020 2/1/2020

2/28/2020 CRJ1 940,900 2/28/2020
2/28/2020 BALANCE 415,920
2/28/2020

ACCOUNTS PAYABLE

2/28/2020 GJ1 25,000 108,000 BALANCE 2/1/2020

43,889.00 CDJ1 234,000 668,000 PJ1 2/28/2020

517,000 BALANCE 2/28/2020
 BORO, CAPITAL B

2/28/2020 GJ1 200,000 1,569,000 BALANCE 2/1/2020 2/28/2020

267,920 GJ1 2/28/2020 2/28/2020
1,636,920 BALANCE 2/28/2020

SALES SALES R

250,000 CRJ1 2/7/2020 2/10/2020

1,082,000 SJ1 2/28/2020 2/26/2020
2/28/2020 GJ1 1,332,000 1,332,000 BALANCE 2/28/2020 2/28/2020
- BALANCE 2/28/2020

PURCHASES PURCHASE

2/28/2020 PJ1 668,000 668,000 GJ1 2/28/2020 2/28/2020

2/28/2020 BALANCE -
 SALARIES EXPENSE

2/15/2020 CDJ1 51,000 2/28/2020

2/28/2020 GJ1 51,000 2/28/2020
2/28/2020 BALANCE 102,000 102,000 GJ1 2/28/2020
2/28/2020 BALANCE -
 ACCOUNTS RECEIVABLE ALLOWANCE FOR BAD D

BALANCE 192,000 70,000 GJ1 2/10/2020

SJ1 1,082,000 71,000 GJ1 2/26/2020
705,000 CRJ1 2/28/2020
BALANCE 428,000

SALARIES PAYABLE MORTGAGE PAYABL

51,000 GJ1 2/28/2020

 BORO, WITHDRAWALS INCOME SUMMARY

CDJ1 200,000 200,000 GJ1 2/28/2020 2/28/2020 GJ1

BALANCE - 2/28/2020 GJ1

SALES RETURNS AND ALLOWANCES SALES DISCOUNTS

GJ1 70,000 2/28/2020 CRJ1

GJ1 71,000
BALANCE 141,000 141,000

PURCHASES RETURNS AND ALLOWANCES PURCHASE DISCOUN

GJ1 25,000 25,000 GJ1 2/28/2020

- BALANCE 2/28/2020
 SUPPLIES EXPENSE INSURANCE EXPENS

GJ1 58,000 58,000 GJ1 2/28/2020 2/28/2020 GJ1

BALANCE - 2/28/2020 BALANCE
ALLOWANCE FOR BAD DEBTS MERCHANDISE INVENTORY

15,000 GJ1 2/28/2020 2/1/2020 BALANCE 413,000

2/28/2020 GJ1 397,000
2/28/2020 BALANCE 397,000

MORTGAGE PAYABLE

2,600,000 BALANCE 2/1/2020

 INCOME SUMMARY

1,493,100 1,761,020 GJ1 2/28/2020

267,920
- BALANCE 2/28/2020

SALES DISCOUNTS

14,100 14,100

PURCHASE DISCOUNTS FREIGHT IN

7,020 7,020 CDJ1 2/28/2020 2/28/2020 CDJ1 13,000

- BALANCE 2/28/2020 2/28/2020 BALANCE -
INSURANCE EXPENSE DEPRECIATION EXPENSE - BUILDING

2,000 2,000 GJ1 2/28/2020 2/28/2020 GJ1 9,000

- 2/28/2020 BALANCE -
HANDISE INVENTORY SUPPLIES

413,000 GJ1 2/28/2020 2/1/2020 BALANCE 51,000

2/19/2020 CDJ1 21,000
2/28/2020 BALANCE 72,000 58,000 GJ1 2/28/2020
2/28/2020 BALANCE 14,000
FREIGHT IN

13,000
TION EXPENSE - BUILDING DEPRECIATION EXPENSE - EQUIPMENT

9,000 GJ1 2/28/2020 2/28/2020 GJ1 12,000 12,000 GJ1 2/28/2020

2/28/2020 BALANCE -
 PREPAID INSURANCE LAND

2/1/2020 BALANCE 48,000 2,000 GJ1 2/28/2020 2/1/2020

2/28/2020 BALANCE 46,000

 FREIGHT OUT ADVERTISING EX

2/18/2020 CDJ1 7,000 7,000 GJ1 2/28/2020 2/7/2020

2/28/2020 BALANCE - 2/28/2020
 LAND BUILDING

460,000 2/1/2020 BALANCE 1,750,000

 ADVERTISING EXPENSE INTEREST EXPENSE

CDJ1 6,000 6,000 GJ1 2/28/2020 2/14/2020 CDJ1 26,000

BALANCE - 2/28/2020 BALANCE -
BUILDING ACCUMULATED DEPRECIATION - BUILDING

350,000 BALANCE
9,000 GJ1
359,000 BALANCE
TEREST EXPENSE BAD DEBTS EXPENSE

26,000 GJ1 2/28/2020 2/28/2020 GJ1 15,000 15,000 GJ1

2/28/2020 BALANCE -
UILDING EQUIPMENT

2/1/2020 2/1/2020 BALANCE 2,310,000

2/28/2020
2/28/2020
 MISCELLANEOUS EXPENSE

2/28/2020 2/22/2020 CDJ1 7,000 7,000 GJ1 2/28/2020

2/28/2020 BALANCE -
ACCUMULATED DEPRECIATION - EQUIPMENT

630,000 BALANCE 2/1/2020

12,000 GJ1 2/28/2020
642,000 BALANCE 2/28/2020
MARIKINA D. BORO SHOES COMPANY

ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER

ARIANA VENTI WASAK

2/1/2020 BALANCE 192,000 113,000 CDJ1 2/1/2020 2/5/2020

2/28/2020 BALANCE 79,000
2/28/2020

MARIKINA D. BORO SHOES COMPANY

ACCOUNTS PAYABLE SUBSIDIARY LEDGER

AIR BINAY COMPANY KRUSTY

2/2/2020 CDJ1 64,000 108,000 BALANCE 2/1/2020 2/8/2020

44,000 BALANCE 2/28/2020
 WASAK EFRON LEBROWN JAMES

SJ1 270,000 70,000 GJ1 2/10/2020 2/17/2020 SJ1 392,000

200,000 CRJ1 2/12/2020 2/25/2020 SJ1 420,000
BALANCE - 2/28/2020 BALANCE 349,000

KRUSTY LOPEZ STILLETO SHOES

CDJ1 170,000 170,000 PJ1 2/4/2020

- BALANCE 2/28/2020
LEBROWN JAMES

392,000 CRJ1 2/23/2020

71,000 GJ1 2/28/2020

STILLETO SHOES ADDADIS COMPANY

125,000 PJ1 2/21/2020 2/28/2020 GJ1 25,000 373,000 PJ1 2/24/2020

348,000 BALANCE 2/28/2020
 MARIKINA D. BORO SHOES COMPANY

SCHEDULE OF ACCOUNTS RECEIVABLE

as of February 28, 2020

Customer Name Amount of Receivable Allowance for Bad Debts

Ariana Venti 79,000 15,000

Wasak Efron - -

LeBrown James 349,000 -

TOTAL 428,000 15,000

MARIKINA D. BORO SHOES COMPANY

SCHEDULE OF ACCOUNTS RECEIVABLE

as of February 28, 2020

Customer Name Amount of Payable

Air Binay Company 44,000

Krusty Lopez -

Stilleto Shoes 125,000

Addadis Company 348,000

TOTAL 517,000
MPANY

VABLE

Net Realizable Value

64,000

349,000

413,000
MARIKINA D. BORO SHOES COMPANY

WORKSHEET

ACCOUNT UNADJUSTED TRIAL BALANCE

DEBIT CREDIT

110 Cash 415,920

120 Accounts Receivable 428,000
125 Allowance for Bad Debts

130 Merchandise Inventory 413,000

140 Supplies 72,000
150 Prepaid Insurance 48,000
160 Land 460,000
170 Building 1,750,000
175 Accumulated Depreciation - Building 350,000
180 Equipment 2,310,000
185 Accumulated Depreciation - Equipment 630,000
210 Accounts Payable 517,000
220 Salaries Payable

230 Mortgage Payable 2,600,000

310 Boro, Capital 1,569,000
320 Boro, Withdrawals 200,000
Cost of Goods Sold

330 Income Summary

410 Sales 1,332,000

420 Sales Returns and Allowances 141,000
430 Sales Discounts 14,100
510 Purchases 668,000
520 Purchases Returns and Allowances 25,000
530 Purchase Discounts 7,020
540 Freight In 13,000
610 Salaries Expense 51,000
620 Supplies Expense

630 Insurance Expense

640 Depreciation Expense - Building

650 Depreciation Expense - Equipment

660 Freignt Out 7,000

670 Advertising Expense 6,000
680 Interest Expense 26,000
690 Bad Debts Expense

695 Miscellaneous Expense 7,000

7,030,020 7,030,020
Net Income
 ADJUSTMENTS ADJUSTED TRIAL BALANCE INCOME STATEMENT

DEBIT CREDIT DEBIT CREDIT DEBIT

415,920
428,000
15,000 15,000
- - 413,000 413,000
58,000 14,000
2,000 46,000
460,000
1,750,000
9,000 359,000
2,310,000
12,000 642,000
517,000
51,000 51,000
2,600,000
1,569,000
200,000

397,000 - 397,000
1,332,000
141,000 141,000
14,100 14,100
668,000 668,000
25,000
7,020
13,000 13,000
51,000 102,000 102,000
58,000 58,000 58,000
2,000 2,000 2,000
 9,000 9,000 9,000
12,000 12,000 12,000
7,000 7,000
6,000 6,000
26,000 26,000
15,000 15,000 15,000
7,000 7,000
544,000 147,000 7,514,020 7,117,020 1,493,100
267,920
1,761,020
INCOME STATEMENT BALANCE SHEET COST OF GOOD SOLD

CREDIT DEBIT CREDIT DEBIT CREDIT

415,920
428,000
15,000
397,000 397,000 413,000 397,000
14,000
46,000
460,000
1,750,000
359,000
2,310,000
642,000
517,000
51,000
2,600,000
1,569,000
200,000
664,980

1,332,000

668,000
25,000 25,000
7,020 7,020
13,000
1,761,020 6,020,920 5,753,000 1,094,000 1,094,000
267,920
1,761,020 6,020,920 6,020,920 1,094,000 1,094,000
 INCOME STATEMENT BALANCE SHEET

DEBIT CREDIT DEBIT CREDIT

415,920
428,000
15,000
397,000
14,000
46,000
460,000
1,750,000
359,000
2,310,000
642,000
517,000
51,000
2,600,000
1,569,000
200,000
664,980

1,332,000
141,000
14,100

102,000
58,000
2,000
 9,000
12,000
7,000
6,000
26,000
15,000
7,000
1,064,080 1,332,000 6,020,920 5,753,000
267,920 267,920
1,332,000 1,332,000 6,020,920 6,020,920
 MARIKINA D. BORO SHOES COMPANY
INCOME STATEMENT
for the month ended February 28, 2020

Sales
Gross Sales 1,332,000
Less: Sales Returns and Allowances 141,000
Sales Discounts 14,100 155,100
Net Sales 1,176,900

Cost of Goods Sold

Merchandise Inventory, 02/01/2020 413,000
Purchases 668,000
Less: Purchases Returns and Allowances 25,000
Purchases Discounts 7,020 32,020
Net Purchases 635,980
Freight In 13,000
Net Cost of Purchases 648,980
Total Cost of Goods Available for Sale 1,061,980
Less: Merchandise Inventory, 02/28/2020 397,000
Cost of Goods Sold 664,980

Gross Profit 511,920

Operating Expenses
Salaries Expense 102,000
Supplies Expense 58,000
Insurance Expense 2,000
Depreciation Expense - Building 9,000
Depreciation Expense - Equipment 12,000
Freignt Out 7,000
Advertising Expense 6,000
Interest Expense 26,000
Bad Debts Expense 15,000
Miscellaneous Expense 7,000
Total Operating Expenses 244,000

NET INCOME 267,920

 MARIKINA D. BORO SHOES COMPANY
STATEMENT OF CHANGES IN EQUITY
for the month ended February 28, 2020

Boro, Capital, Beginning 1,569,000

Add: Net Income 267,920

Less: Personal Withdrawals 200,000

BORO, CAPITAL, END 1,636,920

 MARIKINA D. BORO SHOES COMPANY
BALANCE SHEET
as of February 28, 2020

ASSETS

Current Assets
Cash 415,920
Accounts Receivable 428,000
Less: Allowance for Bad Debts 15,000 413,000
Merchandise Inventory 397,000
Supplies 14,000
Prepaid Insurance 46,000
Total Current Assets 1,285,920

Noncurrent Assets
Land 460,000
Building 1,750,000
Less: Accumulated Depreciation - Building 359,000 1,391,000
Equipment 2,310,000
Less: Accumulated Depreciation - Equipment 642,000 1,668,000
Total Noncurrent Assets 3,519,000

TOTAL ASSETS 4,804,920

LIABILITIES AND OWNER'S EQUITY

Current Liabilities
Accounts Payable 517,000
Salaries Payable 51,000
Total Current Liabilities 568,000

Noncurrent Liabilities
Mortgage Payable 2,600,000

Owner's Equity
Boro, Capital, End 1,636,920

TOTAL LIABILITIES AND OWNER'S EQUITY 4,804,920

 MARIKINA D. BORO SHOES COMPANY
POST CLOSING TRIAL BALANCE
as of Febuary 28, 2020

Debit Credit

110 Cash 415,920

120 Accounts Receivable 428,000
125 Allowance for Bad Debts 15,000
130 Merchandise Inventory 397,000
140 Supplies 14,000
150 Prepaid Insurance 46,000
160 Land 460,000
170 Building 1,750,000
175 Accumulated Depreciation - Building 359,000
180 Equipment 2,310,000
185 Accumulated Depreciation - Equipment 642,000
210 Accounts Payable 517,000
220 Salaries Payable 51,000
230 Mortgage Payable 2,600,000
310 Boro, Capital 1,636,920
5,820,920 5,820,920